2021 (3) TMI 395 - AT - Income Tax

Rejection of books of accounts - AO framed the assessment exparte u/s 144 and made the addition on account of unexplained deposit in bank account and on account of unexplained investment in purchase of the car also confirmed by CIT-A - HELD THAT - CIT(A) sustained the additions made by the A.O. by passing the impugned order in slip- shod manner. He simply stated that the assessee could nor furnish the complete set of bills and vouchers and the linking of the transactions to the books entries could not be verified. However, it is not brought on record how and in what manner the transactions to the book entries were not linked. CIT(A) also did not dispose off the legal issue agitated by the assessee against the completion of the assessment under section 144 of the Act. The directions given by the ITAT Chandigarh Bench B Chandigarh 2014 (10) TMI 1032 - ITAT CHANDIGARH were not followed properly, we, therefore deem it appropriate to set aside this case back to the file of the Ld. CIT(A) to be adjudicated afresh in accordance with law after providing due and reasonable opportunity of being heard to the assessee. CIT(A) is also directed to pass the speaking order. We also direct the assessee to cooperate and not to seek undue unwarranted adjournments. - Appeal of assessee allowed for statistical purposes.

Summary

Issues:
1. Rejection of books of accounts by Ld. CIT(A) without prior notice under section 145(3).
2. Dismissal of appeal without discussing merits due to incomplete set of bills and vouchers.
3. Confirmation of arbitrary additions of specific amounts.
4. Rejection of claim under section 80C.
5. Addition of unexplained investment in purchasing a car.

Analysis:

1. The Assessee appealed against the Ld. CIT(A)'s order dated 04/03/2019, challenging the rejection of books of accounts without prior notice under section 145(3). The Assessee argued that the Ld. CIT(A) exceeded jurisdiction by not providing a convincing reason for rejecting the books. The Tribunal found that the Ld. CIT(A) did not follow proper procedure and set aside the action, directing a reevaluation of the issue.

2. The Assessee also contested the dismissal of the appeal by the Ld. CIT(A) without discussing the merits due to incomplete bills and vouchers. The Tribunal noted the lack of detailed examination by the Ld. CIT(A) and directed a fresh adjudication with proper opportunity for the Assessee to present their case.

3. Specific arbitrary additions of amounts were confirmed by the Ld. CIT(A) without adequate justification. The Assessee argued that the deposits and investments were explainable from known sources. The Tribunal found the Ld. CIT(A)'s decision lacking in thorough analysis and directed a reevaluation of these additions.

4. The Ld. CIT(A) rejected the Assessee's claim under section 80C citing incomplete documentation. The Assessee maintained that the claim was supported by valid evidence. The Tribunal observed deficiencies in the Ld. CIT(A)'s reasoning and instructed a fresh review of the claim.

5. An addition was made for an unexplained investment in purchasing a car, which the Assessee argued was explainable with evidence such as a bank loan. The Tribunal found the Ld. CIT(A)'s decision lacking in detailed examination and directed a reevaluation with proper consideration of the evidence presented.

In conclusion, the Tribunal allowed the Assessee's appeal for statistical purposes, emphasizing the importance of proper procedure and thorough examination in tax proceedings. The case was remanded back to the Ld. CIT(A) for a fresh adjudication in accordance with the law, with a directive to provide reasonable opportunities for the Assessee to present their case effectively.